UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
NovAccess Global Inc. (“NovAccess,” the “company,” “we” or “us”) issued a convertible promissory note to 13 Paul Lending LLC on August 16, 2023. Pursuant to the note, 13 Paul Lending loaned NovAccess $55,000. The note has a provision that requires us to make all filings with the Securities and Exchange Commission required by the Securities Exchange Act of 1934. We have not filed the company’s annual report for fiscal 2023 and are in default of this provision of the note. The note provides that if there is a default, 13 Paul Lending may accelerate the due date of the loan and require immediate payment of amounts outstanding under the note, multiplied by 150% as a penalty. On February 1, 2024, 13 Paul Lending notified us of the default and demanded payment of the note in full. There is currently $86,000 due under the note (150% of the $57,000 outstanding on the note).
We do not have the funds required to repay the note. If we do not make the payment, 13 Paul Lending will have the right to convert the amounts outstanding into shares of our common stock at a significant discount to the market price, in additional to other rights and remedies under the note. On December 29, 2023, to fund our long-term financial needs and repay debt, we entered into a securities purchase agreement with Sumner Global LLC, an affiliate of Sumner Investment Group Inc., pursuant to which Sumner agreed to purchase 33.0 million newly issued shares of our unregistered common stock for $0.11 a share, or $3.63 million in total, and to loan us $7.05 million. We had expected the equity portion of the Sumner transaction to close by January 31, 2023. However, the Sumner transaction has not yet closed, will not close in time for us to repay 13 Paul Lending on a timely basis, and is contingent upon Sumner obtaining the financing necessary to close. Based on Sumner’s assurances, we expect the Sumner transaction to close shortly. For more information about the Sumner transaction, which is contingent on Sumner’s financing, please see our December 29, 2023 Current Report on Form 8-K filed with the Securities and Exchange Commission.
We did not have the necessary funds to commence the audit of our financial statements for 2023, and as a result we were unable to timely file our annual report. On December 29, 2023, AJB Capital Investments, LLC loaned us the funds required to commence the audit and we now plan to file the 2023 annual report by February 12, 2024.
We do not have the funds necessary for continued operations or to repay our currently due debt. We cannot guarantee that we will be able to repay 13 Paul Lending, complete the Sumner transaction, or file our 2023 annual report and make other required filings.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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NovAccess Global Inc. |
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Dated: February 6, 2024 |
/s/ Dwain K. Irvin |
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By Dwain K. Irvin, Chief Executive Officer |
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